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HOW AGENCIES MUST TRANSFORM FOR A NEW GENERATION OF CLIENT
THE BUSINESS CONTEXT
SOMETHING BIG HAS HAPPENED. UNLIKE ANYTHING WE’VE EVER SEEN BEFORE.
THE RULES HAVE CHANGED.
Navigating the next industrial revolutionRevolution Year Information
1784
1870
1969
?
1
Division of labour, electricity, mass production2
3
4
Steam, water, mechanical production equipment
Electronics, IT, automated production
Cyber-physical systems
Source: http://www.weforum.org/agenda/2016/01/the-fourth-industrial-revolution-what-it-means-and-how-to-respond
“We have to compete in a new way that we've never experienced in the past”
– Kwon Oh Hyun, Co-CEO, Samsung
SCALING
KEY BUSINESS STAGES TODAY
TRANSFORMING STALLING
THE DISRUPTION CONTEXT
ave
rag
e c
orp
ora
tio
n li
fecy
cle
(Y
ear
s) 70
60
50
40
30
20
10
61 Years
25 Years18 Years
1958 1980 2015
Source: http://www.innosight.com/innovation-resources/strategy-innovation/creative-destruction-whips-through-corporate-america.cfm
70% OF THE FORTUNE 1000 FROM 15 YEARS AGO ARE NO LONGER ON THE LIST
BY 2027 75% OF THE S&P 500 WILL BE REPLACED
Source: http://www.innosight.com/innovation-resources/strategy-innovation/creative-destruction-whips-through-corporate-america.cfm
Source: https://hbr.org/2014/11/how-smart-connected-products-are-transforming-competition
OUR INDUSTRY CONTEXT
NOT ONE INDUSTRY LEADER HIGHLIGHTS TRANSFORMING THE AGENCY MODEL AS A
PRIORITY FOR 2016
ARE WE GUILTY OF PERPETUATING THE MYTH
OF INDUSTRY INNOVATION
TRANSFORM EXISTING AGENCIES
DEFINE NEW
AGENCIES
WITH NO CLEAR DIRECTION
WE MUST...
Where we are:
1. Consumers Change
2. Clients Change
3. Agencies Change
Where we should be:
1. Consumers Change
2. Agencies Change
3. Clients Change
AGENCY 2.0
?(Pre 1990)
Commission (15%)(1990 - Present)
Hours
Today
AGENCY 1.0 AGENCY 2.0
AGENCY 2.0 INCENTIVE MODEL
DO WORK.BE BUSY.
VALIDATE FEES.
Source: Michael Farmer, Madison Avenue Manslaughter.
Fees: 2-3%
Workload: 2-3%
15YEARS!
Increasing Workloads +
Declining Fees Overwork Teams
Morale DipOutput
Quality Dip
Unhappy Client
Further Morale
Dip
Hire new team - that’ll fix it...
It doesn’t. Loss of
account.
Fire MD. Hire new
MD.
- Cycle Starts Here
Scale & Uniformity
Inability to innovate and be progressive
Unable to respond in real time to an ever changing world
Complex infrastructures, process’ and layers
Talent & Capability Gaps
Ineffective Remuneration model
Linear Thinking
Won’t sell what they can’t do
Too big
Too slow
Uncollaborative culture
Focus on work, not value
AGENCY 2.0 ISSUESS
YM
PT
OM E
FF
EC
T
What if the scale and uniformity that has made ad agencies
iconic and essential in the past is exactly
what makes them vulnerable now?
Can model 2.0 agencies introduce
new ways of working faster than their
dated infrastructure declines?
What if the next generation of client doesn't want to foot
the bill of dismantling and transforming a
company built to work in a pre-digital world?
1 2 3
AGENCY 2.0 BIG QUESTIONS
CLIENTS OF THE FUTURE
MILLENNIALS!!!OR, A ‘CONTEMPORARY MINDSET’ MIGHT BE A BETTER WAY OF PUTTING IT
Connected
Tech-savvy
Digital Native
Purpose Driven
Work/Life Balance
Flexible
Collaborative
Transparent
Problem Solvers
They also have jobs...
Scale & Uniformity
Inability to innovate and be progressive
Unable to respond in real time to an ever changing world
Complex infrastructures, process’ and layers
Talent & Capability Gaps
Ineffective Remuneration model
Linear Thinking
Won’t sell what they can’t do
Too big
Too slow
Uncollaborative culture
Focus on work, not value
AGENCY 2.0 ISSUES
Scale & Uniformity
Inability to innovate and be progressive
Unable to respond in real time to an ever changing world
Complex infrastructures, process’ and layers
Talent & Capability Gaps
Ineffective Remuneration model
Linear Thinking
Won’t sell what they can’t do
Too big
Too slow
Uncollaborative culture
Focus on work, not value
WILL THE NEXT GENERATION CLIENT BUY AGENCY 2.0 ISSUES?S
YM
PT
OM E
FF
EC
T
BRANDS OF THE FUTURE
GONE ARE THE DAYS WHERE A BAD PRODUCT CAN HIDE BEHIND
A GREAT TV SPOT
A GREAT PRODUCT IS NOW THE BASELINE, AND A STORY WELL
TOLD WILL LIFT IT HIGHER
AGENCY 3.0
(Pre 1990)Commission (15%)
(1990 - Present)Hours
Today
AGENCY 1.0 AGENCY 2.0
(The Future)Value
AGENCY 3.0
AGENCY 3.0 INCENTIVE MODEL
MOVE QUICKLYBE EFFICIENTADD VALUE
A SMALL TEAM OF A PLAYERS WILL RUN CIRCLES AROUND GIANT
TEAMS OF B & C PLAYERS
– Steve Jobs
CLARITY & SIMPLICITY, NOT NOISE & CLUTTER
FLATTER STRUCTURES + OPEN, EMPOWERED MINDS
RESPONSIVE TEAMS DESIGNED FOR AN UNPREDICTABLE, FAST PACED WORLD
ACCOUNTABILITY, AND WILLINGNESS TO SHARE IN THE RISK & REWARD
SPEED & AGILITY, NOT SCALE & UNIFORMITY
AGENCY 3.0 ATTRIBUTES
AGENCY 2.0 ATTRIBUTES
Source: here
● CAPITAL● BRAND● CLIENTS
● INNOVATION● AGILITY● EXPERIMENTATION & RISK
ACTIONABLE STEPS(AGENCIES)
REMUNERATION OPERATIONS PROCESS TALENT TOOLS
BILL FOR VALUE, NOT WORK.
STOP THE GLORIFICATION
OF BUSY
INCENTIVIZE OUTPUTS, NOT
INPUTS
FORGET WHAT YOU KNOW,
LEAVE THE OLD MODEL BEHIND
HIRE DIFFERENTLY
INVEST IN NEW SKILLS
BE MORE EFFICIENT.
EMBRACE NEW TOOLS. THEY
WORK.
ACTIONABLE STEPS(CLIENTS)
REMUNERATION OPERATIONS PROCESS TALENT TOOLS
PAY FOR VALUE ADDED, NOT WORK DONE.
INCENTIVIZE OUTPUTS, NOT
INPUTS
CHALLENGE PROCUREMENT
TO EMBRACE NEW WAYS OF
WORKING
INVEST IN AGENCIES BUILT
FOR TODAY & TOMORROW
EMBRACE NEW TOOLS. THEY
WORK.
DOING THINGS THE WAY YOU’VE ALWAYS DONE THEM IS THE HIGHEST
RISK STRATEGY FOR TODAY
BE BRAVE, EXPERIMENT.
@DGLAW
